Businesses often use profitability ratios to gauge their performance against industry benchmarks or competitors. Calculating these ratios involves a straightforward process, typically using figures ...

The profit margin ratio measures the portion of every dollar that you earn that you keep as profit. The profit margin ratio is reported in the form X:1, where X is the profit per dollar. For example, ...

The overhead ratio measures how much of a company's total revenue is spent on indirect costs. This metric is useful for ...

Total margin ratio is found by dividing net income by total revenue, then multiplying by 100. This ratio aids investors in assessing a company's profitability from its total revenues. Using this ratio ...

Successful businesses depend on diligent managers to analyze key factors that influence profitability and make changes to the business based on their analyses. Managers use a variety of statistical ...

Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia. Chip Stapleton is a Series 7 and Series 66 license holder, CFA Level 1 exam holder, and ...

Claire Boyte-White is the lead writer for NapkinFinance.com, co-author of I Am Net Worthy, and an Investopedia contributor. Claire's expertise lies in corporate finance & accounting, mutual funds, ...